GLENVIEW, Ill. – Illinois Tool Works Inc. (ITW) has reported third quarter diluted earnings per share (EPS) from continuing operations of 90 cents, 2 cents higher than the midpoint of the company’s forecast. As noted in the company’s Sept. 24 announcement, the third quarter forecasted EPS midpoint of 88 cents included a 14-cent reduction from the Industrial Packaging segment moving to discontinued operations and a 9-cent reduction related to a discrete tax charge.
Total company operating revenues were $3.6 billion while operating income was $678 million. Excluding the impact of Decorative Surfaces 2012 results, total company operating revenues grew 2.9 percent and operating income increased 8.4 percent. Organic revenues grew 0.4 percent, with international organic revenues growing 2.9 percent and North American organic revenues declining 1.4 percent. Internationally, Asia Pacific organic revenues grew 6.9 percent, with China organic revenues increasing 21.5 percent. In addition, European organic revenues grew 1.0 percent. The company says it was faced with a difficult year-over-year comparison in its electronics assembly platform, which negatively impacted total company organic revenue growth by 2.5 percent.
"We were pleased with our financial performance in the quarter and the progress we continue to make in executing our Enterprise initiatives," said Scott Santi, president and CEO. "Third quarter operating margins of 19 percent were driven by an 80 basis point contribution from our enterprise initiatives. On a year-to-date basis, free cash flow conversion was solidly above 100 percent of net income, and our adjusted after-tax return on average invested capital was 16.3 percent, up 110 basis points versus the same period last year. In addition, we continued to make disciplined, return-oriented decisions with regard to capital allocation. We completed two strategically targeted acquisitions in the quarter, and year-to-date we have returned nearly $1.6 billion to shareholders in the form of share repurchases and dividends."
The company is now forecasting its full-year diluted income per share from continuing operations to be in a range of $3.56 to $3.64. This EPS range assumes a full-year total revenue growth range of 1 percent to 2 percent. For the 2013 fourth quarter, the company is forecasting diluted income per share from continuing operations to be in a range of 85 cents to 93 cents and assumes a total revenue growth range of 2 percent to 5 percent.
